Does Your State Require a Reserve Study?
Quick Answer: Two separate rulebooks govern your reserves, and boards usually only know about one. Your state’s law varies enormously — California requires a physical inspection every three years plus annual review and owner disclosures; Washington requires a professional study updated annually with a site inspection every third year; Florida requires a structural integrity reserve study for residential condo buildings three stories and up; and Georgia, despite overhauling its HOA law in 2026, requires nothing. Your owners’ lenders, meanwhile, apply in all fifty states. Fannie Mae requires condo budgets to allocate at least 10% to replacement reserves today, rising to 15% for loan applications dated on or after January 4, 2027 — or to justify less with a current reserve study, a path that narrowed on August 3, 2026 when lenders were barred from using the baseline funding method. FHA requires reserves funded at 10% of annual assessments unless a study justifies less. Both require the study to be recent, independent, and based on a site visit. So the practical answer for most condominium associations is that even if your state requires nothing, your buyers’ financing effectively does.
Ask a board whether it’s required to have a reserve study and you’ll usually get one of two answers: a confident “no, our state doesn’t make us,” or a confident “yes, it’s the law.” Both boards are often wrong, and for the same reason — they’re only looking at one of the two rulebooks that actually govern them.
Rulebook one is your state’s statute. It’s the one everybody thinks of, and it varies more than almost any other area of association law.
Rulebook two is mortgage financing. It applies in every state, it’s set by Fannie Mae and FHA rather than a legislature, and it has real teeth — because when a project falls out of compliance, buyers stop being able to get loans and every owner in the building pays for it in resale value.
Here’s how both work.
Rulebook two first, because it applies to you
Start with financing, because it’s the rulebook most boards have never read and the one most likely to reach them.
Fannie Mae’s Selling Guide (B4-2.2-02) requires a condo project’s budget to allocate at least 10% to replacement reserves to pass Full Review. Lender Letter LL-2026-03 raises that to 15% of the annual budgeted income assessment for loan applications dated on or after January 4, 2027. The documented alternative is a reserve study — the Selling Guide accepts a project below the threshold if it has a study “completed within three years” by “an independent third party that has specific expertise” whose recommendations the budget funds.
That alternative narrowed on August 3, 2026. Lenders relying on your study must now verify the budget includes the highest recommended reserve allocation — not merely one of its scenarios — and the baseline funding method is barred outright: a study whose cheapest plan only keeps the balance above zero no longer works as a lending document. The full breakdown is in Fannie Mae’s 15% reserve requirement, and the funding-plan choice it now governs is in full vs. threshold vs. baseline.
FHA runs a parallel system for its own approved-project list. HUD’s Handbook 4000.1 requires a reserve account for capital expenditures and deferred maintenance funded with at least 10% of the aggregate of 12 months of unit assessments — “unless a lower amount is deemed sufficient based upon an acceptable reserve study.” That study must be 36 months old or less, include a site visit, and be prepared by an independent third party with demonstrated reserve study experience. Details in FHA condo approval and your reserve fund.
Notice what these two have in common. Neither requires a reserve study outright — both use one as the escape hatch from a blunt percentage. Both demand it be recent, independent, and grounded in an actual physical inspection. Two frameworks, written separately, arriving at the same conclusion.
For a condominium association, that’s the practical bottom line: your state legislature may be silent, but your owners’ lenders are not.
Rulebook one: what the states actually say
State law falls into rough tiers. Some states mandate a study on a fixed cycle. Some mandate reserve funding or disclosure without mandating a study. Many require nothing at all. Below are the states we’ve documented in detail — we’re adding more over time, and where your state isn’t listed, the safest move is to ask your association’s attorney rather than assume.
California — among the strictest
The Davis-Stirling Act requires a physical inspection of common area components at least once every three years, an annual review of the study and its funding plan, and an annual summary to all members showing the current reserve balance, projected needs, and the board’s funding plan.
California also constrains what a board can do when reserves fall short. Civil Code §5605(b) caps regular assessment increases at 20% and aggregate special assessments at 5% of the budget without a vote of the membership, and §5610 permits emergency assessments in only three narrow situations — one of which requires the board to put in writing that the expense “could not have been reasonably foreseen.” A current reserve study makes that sentence very difficult to write honestly, which is precisely the point.
Buildings with wood-framed balconies, decks, or elevated walkways carry a second obligation: SB 326 (Civil Code §5551) requires an engineer’s inspection every nine years, and the resulting report must be incorporated into the reserve study. Nine years is exactly three inspection cycles — not a coincidence. See California’s reserve study law and SB 326 balcony inspections.
Washington — annual updates, triennial site visit
RCW 64.90.545 requires an association to prepare a reserve study by a reserve study professional and update it annually, with the update “prepared at least every third year by a reserve study professional and based upon a visual site inspection.”
Washington is unusual in writing exemptions directly into the statute. An association may be exempt where the community has only nonresidential units, where reserve costs are nominal, for certain middle housing communities without on-site wastewater systems, and where the cost of the study would exceed 10% of the association’s annual budget. Governing documents may impose stricter requirements than the statute’s baseline.
Florida — structural integrity, and a waiver that closed
Florida regulates the most aggressively, and differently from everyone else. Under Fla. Stat. §718.112, residential condominium buildings three stories or higher must have a structural integrity reserve study (SIRS) based on a visual inspection, completed at least every 10 years.
A SIRS is narrower and more structural than a conventional reserve study, covering the roof, structure, fireproofing, plumbing, electrical, waterproofing and exterior painting, windows and exterior doors, plus “any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000” affecting structural integrity.
Two points boards elsewhere should note. First, who may perform it is restricted: the visual inspection must be performed or verified by an engineer licensed under Florida chapter 471, an architect licensed under chapter 481, or a person certified as a Reserve Specialist or Professional Reserve Analyst by CAI or APRA. Second, Florida’s long tradition of voting to waive reserves has ended for SIRS items — for budgets adopted after December 31, 2024, associations must maintain reserves for the items a SIRS identifies, absent an approved alternative funding method.
(Because of the credential restriction above, Apex does not perform Florida SIRS inspections. We’re listing the requirement because a national reference that omitted Florida would be misleading, not because we’re soliciting the work.)
Georgia — no requirement at all
Georgia is the instructive case, and it’s one of our two home markets.
The Georgia Property Owners’ Bill of Rights Act (SB 406), signed May 12, 2026, is the biggest change to Georgia HOA law in decades — mandatory Secretary of State registration from January 1, 2027, a state complaint process, new limits on foreclosure and attorney’s fees. It is a genuinely significant statute.
And it says nothing whatsoever about reserve studies. Georgia has no statute requiring one, and SB 406 didn’t change that. See Georgia’s SB 406.
So a Georgia condominium board could correctly say “our state doesn’t require a reserve study” — and still find its owners unable to sell because the project fails Fannie Mae or FHA review. That gap between rulebook one and rulebook two is the entire reason this article exists.
What to do if your state requires nothing
Three things, in order.
Check whether you’re a condominium. If you are, rulebook two applies regardless of your state, and it’s the one with transaction consequences. Run the calculation: annual assessment income, amount budgeted to reserves, divide. Most boards have never done it.
Check your governing documents. CC&Rs and bylaws frequently impose reserve obligations the state doesn’t, and they’re enforceable. Plenty of “our state doesn’t require it” boards are already required to by their own documents.
Then decide on the merits. The statutes and the lending rules are both downstream of the same physical reality: components wear out on a schedule, and money either exists when they do or it doesn’t. Percent funded falls every year on a flat contribution whether or not anyone is legally required to notice. A board in a silent state that plans well is in better shape than a board in California that treats the study as paperwork.
Frequently asked questions
Which states require HOAs to have a reserve study?
Requirements vary widely and change often. California requires a physical inspection at least every three years with annual review and owner disclosures; Washington requires a professional study updated annually with a site inspection every third year; Florida requires a structural integrity reserve study for residential condo buildings three stories or higher, at least every ten years. Other states range from reserve disclosure requirements to nothing at all — Georgia, for example, has no reserve study statute. Check your state’s condominium or common interest act, and your own governing documents.
Does Georgia require a reserve study?
No. Georgia has no statute requiring an HOA or condominium association to obtain a reserve study, and SB 406 — the 2026 overhaul of Georgia HOA law — did not add one. Georgia condominium associations are still subject to Fannie Mae and FHA reserve requirements for project financing, so the practical pressure exists even without a state mandate.
How often does California require a reserve study?
The Davis-Stirling Act requires a physical inspection of common area components at least once every three years, plus annual review of the study and its funding plan and an annual summary to members. Associations with wood-framed balconies or elevated walkways have an additional obligation under SB 326: an engineer’s inspection every nine years, with the report incorporated into the reserve study.
What happens if our state doesn’t require a reserve study?
Nothing, legally — but two other constraints usually still apply. Your governing documents may require reserves independently of state law, and if you’re a condominium, Fannie Mae and FHA both impose reserve thresholds with a current, independent reserve study as the alternative path. A project that fails those tests loses access to whole categories of buyer, which affects resale value for every owner.
Do lender reserve requirements apply in every state?
Yes. Fannie Mae’s project standards and FHA’s condominium approval requirements are national — they don’t vary by state and they don’t care what your legislature has or hasn’t passed. Both apply to condominium project review rather than to single-family HOAs, which is why condominium associations in unregulated states are the group most likely to be caught out.
When does the Fannie Mae 15% reserve requirement start?
The 15% allocation applies to loan applications dated on or after January 4, 2027; the current Selling Guide threshold is 10%. Two related changes arrived earlier, on August 3, 2026 — lenders relying on a reserve study must verify the budget funds its highest recommendation, and the baseline funding method can no longer be used at all. Boards on baseline plans were affected first, well before the headline percentage changes.
How old can a reserve study be before it stops counting?
For FHA, a study justifying reserves below the 10% threshold must be 36 months old or less and include a site visit. Fannie Mae applies a similar recency standard for condo project review. California’s three-year inspection cycle lines up with both, which is a useful coincidence: an association updating on the statutory cycle generally stays inside the lending windows too.
The bottom line
“Does my state require a reserve study?” is the wrong first question. The better one is: what would happen at the next sale in our building?
In California, a board that ignores the study is out of compliance. In Georgia, it isn’t — right up until an owner’s buyer can’t get financing, and the discount lands on everyone. Two very different laws, the same underlying physics, and the same fix.
Not sure what applies to your association — or whether your current study satisfies your lender’s standard? Contact Apex Reserve Group. We prepare studies written to your state’s rules, with the site visit both lending frameworks require, prepared independently: we don’t manage communities and we don’t bid the repairs we recommend. For the whole subject in order, see the complete guide to reserve studies.
This article is general information about statutory and lending requirements, not legal advice. Verify your own state’s current law and your governing documents with your association’s attorney.